The Impact of the PCAOB on the Conduct of the Audit

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1 The Impact of the PCAOB on the Conduct of the Audit The Oread Lawrence, KS April 26 28, 2012 Accounting & Information Systems

2 2012 Deloitte Foundation/ University of Kansas Auditing Symposium The Impact of the PCAOB on the Conduct of the Audit April 26 th 28 th, 2012 Thursday, April 26 Oread Hotel, University of Kansas 9 th Floor Terrace 7:00 9:00 Reception Friday, April 27 Oread Hotel, University of Kansas Griffith Room 7:00 8:00 a.m. Breakfast 8:00-8:30 a.m. Welcome and Opening Remarks Director John Sweeney, University of Kansas Dean Neeli Bendapudi, University of Kansas Howard Cohen, Deloitte LLP 8:30 9:30 a.m. Brian Croteau, Deputy Chief Accountant SEC Update on the Activities of the SEC s Professional Practice Group of the Office of the Chief Accountant 9:30 9:45 a.m. Refreshment break 9:45 11:45 Research session Susan Scholz, Moderator Mandatory Audit Rotation: An International Investigation Kathleen Harris, The University of Houston Scott Whisenant, The University of Houston Training Auditors to Think Skeptically David Plumlee, University of Utah Brett A. Rixom, University of Utah Andrew J. Rosman, University of Connecticut Lame Duck Auditors: An Effective Constraint Over Management Discretion? Cory A. Cassell, University of Arkansas, Fayetteville, AR Linda A. Myers, University of Arkansas, Fayetteville, AR Timothy A. Seidel, University of Arkansas, Fayetteville, AR Jian Zhou, University of Hawaii at Manoa

3 11:45-12:45 p.m. Lunch Hancock Room 1:00 2:00 p.m. Dan Goelzer, Former PCAOB Board Member Re-Examining the Auditor s Relationship with Audit Committees and with Investors: The PCAOB s Professional Skepticism and Reporting Model Projects 2:00 2:15 p.m. Refreshment break 2:15-3:45 p.m. Panel discussion: The Past and Future Impact of the PCAOB on the Audit Bob Kueppers, Deputy CEO, Deloitte LLP Charles M. Allen, CEO, Crowe Horwath LLP Zoe-Vonna Palmrose, University of Washington Dan Goelzer, ex-pcaob Board Member 3:45 4:00 p.m. Refreshment break Moderator: Cindy Fornelli, Executive Director, CAQ 4:00 5:00 p.m. Bob Moritz, CEO, PricewaterhouseCoopers 6:00 8:30 p.m. Reception and dinner Saturday, April 28 Oread Hotel, University of Kansas Griffith Room 8:30 10:00 a.m. Research session Scott Bronson, Moderator Audit Partner Disclosure: An Examination of Investor Reaction to Negative Information and Potential Implications for Auditor Independence Tamara A. Lambert, University of Massachusetts, Amherst Benjamin L. Luippold, Georgia State University Chad M. Stefaniak, Oklahoma State University Who Did the Audit: Investor Perceptions and PCAOB Disclosures of Other Audit Participants Carol Callaway Dee, University of Colorado, Denver Ayalew Lulseged, University of North Carolina, Greensboro Tianming Zhang, Florida State University Are Auditors Skeptical of Management s Level 2 versus Level 3 Fair Value Classification Judgments? Christine E. Earley, Providence College Vicky B. Hoffman, University of Pittsburgh Jennifer R. Joe, Georgia State University

4 10:00 10:15 a.m. Refreshment break 10:15 11:45 a.m. Research session Adi Masli, Moderator 11:45-1:00 p.m. Lunch and closing Can Providing Advice on Management s Accounting Estimates Improve Auditor Objectivity? Jonathan Grenier, Miami University Bradley Pomeroy, University of Illinois at Urbana-Champaign Stephen Rowe, University of Illinois at Urbana-Champaign Auditing the Audit Committee: A Study of Shareholders and Boards Efforts to Hold Audit Committee Members Accountable Stephanie J. Rasmussen, The University of Texas at Arlington Jaime J. Schmidt, The University of Texas at Austin Watching the Watchdogs: An Examination of the PCAOB Quality Control Inspection Reports on Triennially Inspected Audit Firms and the AICPA Peer Review Reports Srinivasan Ragothaman, The University of South Dakota ACKNOWLEDGEMENT We would like to thank Deloitte and the Deloitte Foundation for their 40 years of generous sponsorship of the Audit Symposium. The interactions of academics and business professionals enabled by this event have greatly enhanced the development of auditing theory and practice.

5 Participants & Affiliation Charles Allen - Crowe Horwath Vicky Arnold - University of Central Florida Matthew Beck - University of Missouri Christopher Briggs - PricewwaterhouseCoopers Scott Bronson - University of Kansas Margot Cella - Center for Audit Quality Howard Cohen - Deloitte. Brian Croteau US Securities and Exchange Commission (SEC) Jame Dalkin - US Government Accountability Office (GAO) Brian Daugherty - University of Wisconsin- Milwaukee Carol Callaway Dee - University of Colorado-Denver Debora Deering - University of Kansas Larry Depp - Deloitte Bill Dilla - Iowa State University Christopher Scott Donnelly - Miller, Haviland, Ketter PC, PA Rajib Doogar - University of Illinois-Urbana Champaign Bob Duckworth - Deloitte. Aron Dunn - Allen, Gibbs & Houlik, LC Christine Earley - University of Providence Elizabeth Emeigh - University of Kansas Rob Fisher - University of Kansas Cindy Fornelli - Center for Audit Quality Mark Fortino - Bank of Blue Valleyu Marshall Geiger- University of Richmond Daniel Goelzer - PCAOB Kyri Gorges - KPMG Jeremy Griffin - University of Notre Dame Emily Griffith - University of Georgia Aaron Grist- Ernst & Young Parveen Gupta - Lehigh University Karl Hackenbrack - Vanderbilt University Jackie Hammersley - University of Georgia Neal Hannon - University of Kansas Jim Heintz - University of Kansas Vicky Hoffman - University of Pittsburgh Chris Hogan - Michigan State University Jennifer Joe - Georgia State University Jane Kennedy - University of Washington Tim Kersey Deloitte. Jim Ketter - Miller, Haviland, Ketter PC, PA Bill Kinney - University of Texas Carol Knapp - University of Oklahoma Chris Knapp - University of Oklahoma Gopal Krishnan - Lehigh University Jack Krogstad - Creighton University Robert Kueppers Deloitte. Mark Lacy - Deloitte. Tamara Lambert - University of Massachusetts Andrew Li - University of Kansas

6 Ben Luippold - Georgia State University Ayalew Lulseged - University of Carolina-Greensboro Juan Mao - University of Kansas John Martin - PricewaterhouseCoopers Adi Masli - University of Kansas Elaine Mauldin - University of Missouri Felix Meschke - University of Kansas Bill Messier - University of Nevada- Las Vegas Robert Moritz - PricewaterhouseCoopers Jennifer Muelle r- Auburn University Ed O Donnell - Southern Illinois University Zoe-Vonna Palmrose - University of Washington Paul Penlar - Ernst & Young Gary Peters - University of Arkansas David Plumlee - University of Utah Christine Porter - University of Kansas Srini Ragothaman - University of South Dakota Bob Ramsay - University of Kentucky Sunita Rao - University of Kansas Stephanie Rasmussen - University of Texas- Arlington Stephen Rowe - University of Illinois Dave Rudicel - PricewaterhouseCoopers Jaime Schmidt - University of Texas-Austin Susan Scholz - University of Kansas Timothy Seidel - University of Arkansas Timothy Shaftel - University of Kansas Michael Shaub - Texas A&M University Sandra Shelton - DePaul University Matt Sherwood - University of Kansas David Smith - University of Nebraska-Lincoln Rajendra Srivastava - University of Kansas Johnathan Stanley - Auburn University Chad Stefaniak - Oklahoma State University Hannah Stout University of Kansas Steve Sutton - University of Central Florida John Sweeney - University of Kansas Bill Taylor - Retired- Ernst & Young Mark Taylor - Case Western Reserve University Bill Thomas - Baylor University Anna Thompson - University of Illinois at Urbana Champaign Sean Toohig - PricewaterhouseCoopers Miklos Vasarhelyi - Rutgers University-Newark Nancy Weatherholt - University of Missouri-Kansas City Scott Whisenant - University of Houston Janie Whiteaker-Poe - University of Kansas Christopher Wolf e- Texas A&M University William Wright - University of Illinois Yang Xu - University of Kansas Jian Zhang - San Jose State University Jian Zhou - University of Hawaii-Manoa

7 Biographies Chuck Allen Chief Executive Officer Crowe Horwarth LLP Chuck Allen has served as Crowe Horwath LLP s Chief Executive Officer for the past 5 years. He has more than 35 years with the firm, advancing through the audit and private equity practices. Crowe Horwath LLP is one of the largest public accounting and consulting firms in the United States. Under its core purpose of Building Value with Values, Crowe serves both public and private investors and companies with audit, tax, advisory, risk and performance services. Margot Cella Director of Research Center for Audit Quality (CAQ) Margot Cella is the Director of Research for the Center for Audit Quality (CAQ). Margot serves as the CAQ s liaison with the accounting and auditing professoriate. She coordinates the activities of the CAQ s Research Advisory Board, which provides support for scholarly academic research; the Board is comprised of audit firm representatives and academic scholars. Margot also plays a key role in the CAQ s public policy initiatives, including the Center s anti-fraud efforts. Prior to joining the CAQ, Margot worked at Accenture LLP as Global Research Lead for the Products Group, which focused on the consumer goods, retail, pharmaceutical and automotive industries. She was the Director of Research for a large trade association, which produced over 25 major publications each year on consumer and business issues related to the food retailing supply chain. Margot began her career conducting public policy research for federal and state agencies. She directed a major study that evaluated the federal government s inspection process for nursing homes, analyzing the consistency with which inspectors applied quality of care and quality of life standards and issued deficiency citations. Other areas of focus included health care reimbursement and utilization of services. Margot earned her M.S. in Biostatistics from Georgetown University.

8 Brian T. Croteau Deputy Chief Accountant U.S. Securities and Exchange Commission (SEC) Brian Croteau is the Deputy Chief Accountant of the Professional Practice Group within the Office of the Chief Accountant (OCA) at the U.S. Securities and Exchange Commission in Washington, DC. In this position, he plays a key role in the Commission s work related to overseeing the activities of the Public Company Accounting Oversight Board (PCAOB), managing the resolution of auditor independence issues and ethical matters, and monitoring audit and independence standard setting internationally. He also provides advice and develops positions on issues related to performance of audits, including auditor independence, that are referred to the OCA due to their complexity or policy implications. Brian has also served as Senior Associate Chief Accountant in the Professional Practice Group of OCA during his previous tenure at the SEC from Prior to returning to the SEC in June 2010, Brian was a Partner in the National Office of PricewaterhouseCoopers LLP (PwC) from In this role, his primary focus was on audit quality. Brian performed consultations with engagement teams on complex and judgmental auditing matters, and supported firm quality initiatives, including development and implementation of Firm audit policy and guidance. He also participated in various PwC audit training and webcast initiatives, and had active roles in the firm s input to PCAOB, AICPA, and IAASB audit standard- setting activities. Additionally, he was active on numerous task forces of the AICPA and the Center for Audit Quality. Brian worked as a senior manager in the Hartford, Connecticut office of PwC prior to joining the SEC staff in During his previous ten years of employment with PwC from , he managed the audits of both public and private companies. Brian is a Certified Public Accountant and he is a member of the AICPA. Brian earned his B.B.A. in accounting from the University of Massachusetts at Amherst. He was named 2007 accounting alumnus of the year of the UMass-Amherst Eisenberg School of Management. Cynthia M. Fornelli Executive Director Center for Audit Quality (CAQ) Cindy Fornelli is the Executive Director for the Center for Audit Quality (CAQ). In 2011, Fornelli was honored for the third time by Directorship magazine as one of the 100 most influential people on corporate governance and in the boardroom, and Accounting Today named her one of the 100 most influential people in accounting for the fifth consecutive year. Fornelli currently serves as a member of the Financial Accounting Standards Advisory Council and the Securities and Exchange Committee Historical Society s Board of Trustees, Class of She previously served on the National Association of Corporate Directors (NACD) 2010 Blue Ribbon Commission on the Audit Committee and the NACD 2009 Blue Ribbon Commission on Risk Governance. Prior to becoming the Center s Executive Director, Fornelli was the Regulatory and Conflicts Management Executive at Bank of America. Before joining Bank of America, Fornelli was Deputy Director of the Division of Investment Management of the U.S. Securities and Exchange Commission.

9 Daniel Goelzer Ex-Board Member Public Company Accounting Oversight Board (PCAOB) Daniel L. Goelzer was appointed by the Securities and Exchange Commission as a founding member of the Public Company Accounting Oversight Board in October He served as Acting Chairman of the PCAOB from August 2009 through January He left the Board in March From 1983 to 1990, Mr. Goelzer served as General Counsel of the SEC. From 1990 until joining the Board, Mr. Goelzer was a partner in the Washington, D.C., office of the law firm of Baker & McKenzie. He practiced securities and corporate law, specializing in matters involving the SEC. From 1969 to 1970, he worked as an auditor in the Milwaukee, Wisconsin, office of Deloitte & Touche. Mr. Goelzer, a native of Milwaukee, received a B.B.A. (Accounting) from the University of Wisconsin, a J.D. from the University of Wisconsin School of Law, and an L.L.M. from the National Law Center, George Washington University. He is a member of the Wisconsin and District of Columbia Bars and holds a Wisconsin CPA certificate. Robert J. Kueppers Deputy CEO Deloitte LLP Robert J. Kueppers is deputy CEO of Deloitte LLP and has over 35 years of professional experience. In this capacity he works closely with the CEO of Deloitte LLP. He is responsible for regulatory and professional matters, and also serves major clients of the firm in an advisory capacity. Mr. Kueppers previously served as the senior technical partner with Deloitte & Touche LLP in its national office in Wilton, Connecticut. Prior to that, Mr. Kueppers was in charge of the professional practice group, served as the national director of SEC services, and served as the national director of independence. During his career, Mr. Kueppers was also the chief financial officer of an SECreporting manufacturing company in New York and a professional accounting fellow in the Office of the Chief Accountant at the SEC in Washington, DC. In 2009, Mr. Kueppers was recognized by Directorship magazine as one of the top 100 influential professionals in corporate governance and in the boardroom. Mr. Kueppers is also a member of the University of Minnesota s Carlson School of Management Board of Overseers, a member of Yale School of Management s Board of Advisors for the Millstein Center for Corporate Governance, a trustee and past chairman of the SEC Historical Society in Washington, D.C., and Chairman of the Board of Directors of the United Way of New York City and of American Corporate Partners, a nationwide mentoring organization for U.S. veterans.

10 Robert E. Moritz Chairman and Senior Partner US Firm of PricewaterhouseCoopers (PWC) Bob Moritz is the Chairman and Senior Partner of the US Firm of PricewaterhouseCoopers LLP, after having been elected by the US partnership to serve a four-year term. Prior to that, Bob served as the Assurance Leader of the US Firm from 2006 to 2009; and from 2004 to 2006 was the Managing Partner of the New York office and Metro Region. Bob joined the firm in 1985 and became a partner in From 1998 to 2001, he served as the Metro Regional Financial Services Leader. From 2001 to 2004, he led the Financial Services Audit and Business Advisory practice, which includes the banking, capital markets, insurance, investment management and real estate sectors. Bob served a three-year tour in PricewaterhouseCoopers Tokyo, providing audit and advisory services to numerous European and US-based financial services organizations operating in Japan. He is a graduate of SUNY Oswego and certified by the American Institute of Certified Public Accountants, the New York State Society of CPAs and the New Jersey State Society of CPAs. He is the Chair of the Center for Audit Quality Governing Board; Board member of the Oswego College Foundation; member of the Atlantic Council; the Board of Trustees of The Conference Board and the Partnership for New York City. Bob resides in Thornwood, NY and has two children. Zoe-Vonna Palmrose Hansen Professor in Business Administration Michael G. Foster School of Business, University of Washington (Seattle) Zoe-Vonna has published and spoken extensively on a variety of issues related to the quality of financial reporting and auditing, including standard-setting, audit regulation, restatements, materiality, audit litigation, the pricing of audit services, and non-audit services. Zoe-Vonna served at the U.S. Securities and Exchange Commission as Deputy Chief Accountant for Professional Practice in the Office of the Chief Accountant from In 2008, Treasury and Risk Magazine named her one of the 100 most influential people in finance. Zoe-Vonna served on the Public Oversight Board s Panel on Audit Effectiveness ( ) and the Auditing Standards Board Fraud Task Force ( ), which developed SAS No. 99, Consideration of Fraud in a Financial Statement Audit. Zoe-Vonna s research and service has been recognized by numerous awards and she was the 2008 American Accounting Association Presidential Scholar. Zoe-Vonna has been on the faculties at the University of California at Berkeley and the University of Southern California; she is the Accounting Circle Professor Emerita of Accounting at USC. A CPA, Zoe- Vonna received her Ph.D. and MBA from the University of Washington and B.S. from Oregon State University.

Panelist Biographies. Eighth Annual CAQ Symposium Waldorf Astoria Hotel August 7, Innovative Approaches to the Development of Auditor Talent

Panelist Biographies. Eighth Annual CAQ Symposium Waldorf Astoria Hotel August 7, Innovative Approaches to the Development of Auditor Talent Eighth Annual CAQ Symposium Waldorf Astoria Hotel August 7, 2016 Panelist Biographies Innovative Approaches to the Development of Auditor Talent MODERATOR TIMOTHY RYAN PwC US Chairman and Senior Partner